Dividend growth model and Domain: Difference between pages

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imported>Doug Williamson
(Make timing of Time 1 future dividend explicit.)
 
imported>Doug Williamson
(Add links.)
 
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(DGM).  
1. ''Information technology.''


The Dividend growth model links the value of a firm’s equity and its market cost of equity, by modelling the expected future dividends receivable by the shareholders as a constantly growing perpetuity.
A part of the internet owned or controlled by an organisation or individual, often having the same suffix in its IP address.


Its most common uses are:
For example "treasurers.org".


(1) Estimating the market <u>cost of equity</u> from the current share price; and


(2) Estimating the fair <u>value</u> of equity from a given or assumed cost of equity.
:<span style="color:#4B0082">'''''3D Secure's 3-domain structure'''''</span>


:"3D Secure is a security protocol...


Expressed as a formula:
:The name 3D Secure derives from 3-domain structure.


Ke = D<sub>1</sub> / P<sub>0</sub> + g
:The authentication is a three-part process, with three parties involved:


''OR (rearranging the formula)''
:*The card issuer, such as Visa or MasterCard
:*The acquirer, and
:*The interoperability domain, such as the payment system.


P<sub>0</sub> = D<sub>1</sub> / ( Ke - g )
:''3D Secure - the Treasurer's Wiki.''




Where:
2.  ''Ownership - control - influence - knowledge.''


P<sub>0</sub> = ex-dividend equity value today.
Any identifiable area of ownership, control, knowledge, influence or responsibility.


D<sub>1</sub> = expected future dividend at Time 1 period later.


Ke = cost of equity per period.
:<span style="color:#4B0082">'''''Mutual understanding with bank supervisory domain
'''''</span>


g = constant periodic rate of growth in dividend from Time 1 to infinity.
:"The existence of Spanish banking groups conducting financial activities in Latin American countries through local subsidiaries – and the possible inverse situation – entails the need for a better mutual understanding of both the banking system and the supervisory domain and for increasing the co-operation and exchange of information between the authorities entrusted with the prudential supervision in both countries... "


:''Spain - other international bilateral MoUs - the Treasurer's Wiki.''


This is an application of the general formula for calculating the present value of a growing perpetuity.


==See also==
* [[Acquirer]]
* [[Authentication]]
* [[Bilateral]]
* [[Card scheme]]
* [[Information technology]]
* [[Interoperability]]
* [[IP address]]
* [[Issuer]]
* [[Market abuse]]
* [[Memorandum of understanding]]  (MoU)
* [[Payment system]]
* [[Protocol]]
* [[Prudential ]]
* [[Prudential regulation]]
* [[Public domain]]
* [[Security]]
* [[Spain]]
* [[Supervision]]
* [[3D Secure]]


 
[[Category:Accounting,_tax_and_regulation]]
'''Example 1'''
[[Category:The_business_context]]
 
[[Category:Identify_and_assess_risks]]
Calculating the market <u>value</u> of equity.
[[Category:Manage_risks]]
 
[[Category:Risk_frameworks]]
 
[[Category:Risk_reporting]]
Where:
 
D<sub>1</sub> = expected dividend at future Time 1 = $10m.
 
Ke = cost of equity per period = 10%.
 
g = constant periodic rate of growth in dividend from Time 1 to infinity = 2%.
 
 
P<sub>0</sub> = D<sub>1</sub> / ( Ke - g )
 
= 10 / ( 0.10 - 0.02 )
 
= 10 / 0.08
 
= $125m.
 
 
 
'''Example 2'''
 
Or alternatively calculating the current market <u>cost of equity</u> using the rearranged formula:
 
Ke = D<sub>1</sub> / P<sub>0</sub> + g
 
 
Where:
 
D<sub>1</sub> = expected future dividend at Time 1 = $10m.
 
P<sub>0</sub> = current market value of equity per period = $125m.
 
g = constant periodic rate of growth in dividend from Time 1 to infinity = 2%.
 
 
Ke = 10 / 125 + 2%
 
= 10%.
 
 
Also known as the Dividend discount model, the Dividend valuation model or the Gordon growth model.
 
 
== See also ==
* [[CertFMM]]
* [[Cost of equity]]
* [[Corporate finance]]
* [[Perpetuity]]
 
[[Category:Corporate_finance]]

Latest revision as of 13:24, 31 October 2022

1. Information technology.

A part of the internet owned or controlled by an organisation or individual, often having the same suffix in its IP address.

For example "treasurers.org".


3D Secure's 3-domain structure
"3D Secure is a security protocol...
The name 3D Secure derives from 3-domain structure.
The authentication is a three-part process, with three parties involved:
  • The card issuer, such as Visa or MasterCard
  • The acquirer, and
  • The interoperability domain, such as the payment system.
3D Secure - the Treasurer's Wiki.


2. Ownership - control - influence - knowledge.

Any identifiable area of ownership, control, knowledge, influence or responsibility.


Mutual understanding with bank supervisory domain

"The existence of Spanish banking groups conducting financial activities in Latin American countries through local subsidiaries – and the possible inverse situation – entails the need for a better mutual understanding of both the banking system and the supervisory domain and for increasing the co-operation and exchange of information between the authorities entrusted with the prudential supervision in both countries... "
Spain - other international bilateral MoUs - the Treasurer's Wiki.


See also